ETFs: Interest also in quality stocks and small caps

"Little encouragement for world ETFs".

Currently, a lot is revolving around U.S. equities. Duisberg sees continued high interest in MSCI USA trackers, for example from Deka (DE000ETFL268) or Invesco (IE00B60SX170). According to Heinrich, S&P 500 and Nasdaq ETFs are in demand, including those with ESG filters. But there is also good demand for quality and small cap stocks from the U.S. (IE00BX7RRJ27, <IE00BMDX0L03>).

There is less activity in the MSCI World ETFs, which are usually so strong in terms of turnover: "Interest in the World ETFs was uncharacteristically relatively low this week," Heinrich puts it. Only a few products made it to the top of the turnover list, such as the Amundi MSCI World III (LU2572257124) and the iShares MSCI World ESG Screened (IE00BFNM3K80). As far as European equities are concerned, Heinrich says that the targeted focus on individual countries is currently striking, specifically the Netherlands, Greece and Germany. Greek equities, for example, are invested in with Lyxor MSCI Greece (FR0010405431), while German equities are invested in with Xtrackers DAX (LU1349386927). "At the European level, there is exposure to ESG and growth ETFs," Heinrich also notes.

Gladly with leverage

The current price setbacks are also attracting investors to short and leveraged ETFs, as Jan Duisberg explains. For example, the L&G DAX Daily 2x Short (IE00B4QNHZ41), which tracks the DAX inversely and with leverage 2, is popular. "It's being traded briskly." Also showing high turnover is WisdomTree Nasdaq 100 3x Daily Leveraged (IE00BLRPRL42), which tracks Nasdaq performance with triple leverage. "This is a perennial favorite with us."

Crypto ETNs in demand again

The recent rise in cryptocurrency prices is also leading to more turnover in crypto ETNs, according to Duisberg. "This concerns bitcoin and ethereum ETFs, but also crypto baskets." For example, VanEck Bitcoin (DE000A28M8D0), 21Shares Ethereum Staking (CH0454664027) and 21Shares Crypto Basket (CH0445689208) are trading a lot, he said. Bitcoin has recently climbed back above $30,000 after a period of weakness in April and May. Since the beginning of the year, this results in a price increase of 82 percent. In 2021, however, the cryptocurrency had still cost more than twice as much. The background for the recent price increase was the news that BlackRock in the U.S. has filed an application for a so-called spot Bitcoin ETF with the U.S. Securities and Exchange Commission. According to FAZ, however, the application has met with resistance from regulators, who in the past had expressed concerns about the market and the lack of investor protection, among other things.

Product from the "ETF Pope"

Incidentally, since last week there is a special ETF from the "ETF Pope" Gerd Kommer, known for bestsellers such as "Sovereign investing with index funds and ETFs" and now present in many media. The L&G Gerd Kommer Multifactor Equity focuses on equities from industrialized and emerging markets. What is special about it is that, on the one hand, the country weighting is 50 percent by market capitalization and 50 percent by economic performance, measured in terms of GDP. This is intended to reduce the cluster risk of the U.S., as the U.S. accounts for a large share of the major MSCI World and MSCI ACWI indices, currently just under 70 percent and 62 percent, respectively. Secondly, the ETF pursues a multifactor approach by overweighting the factor premiums Size, Value, Quality, Investment and Momentum. A distributing (IE000FPWSL69) and an accumulating variant (IE0001UQQ933) are offered. However, with ongoing charges of 50 basis points, the ETF is significantly more expensive than many traditional world ETFs. For example, the popular iShares Core MSCI World (IE00B4L5Y983), the Amundi Prime Global (<LU2089238203>) even costs only 5 basis points.

by: Anna-Maria Borse, 27 June 2023, © Deutsche Börse